The future direction of the Australian dollar will be the key determinant for the timing of the next move in interest rates, economists said.

After cutting last month at the start of the Federal election campaign, the RBA board is expected to adopt a "wait-and-see approach" when it meets as the non-mining economy, particularly the property sector, shows signs it may be preparing for a bout of growth.

Home prices rose by 4 per cent in the past three months across the nation - marking the biggest quarterly gain in four years.

The RP Data report shows prices rose in six of the eight capital cities - highlighting the underlying strength in residential property.

Consumer and business confidence are also expected to get a short-term bounce after the election.

The RBA has slashed official rates by 2.25 per cent to a record low of 2.5 per cent since this cutting cycle began in November 2011.

This has knocked an estimated $450 off the monthly repayments on the average $300,000 mortgage.

JP Morgan chief economist Stephen Walters said one rate cut in an election campaign was easy to explain but two would cross the line.

"Back-to-back monthly moves would be unnecessarily bold in the midst of a federal election campaign," he said.

The prospect of a cut today is rated as only a 7 per cent chance by futures markets. But a cut before Christmas is seen as an almost 80 per cent chance.

HSBC chief economist Paul Bloxham said the RBA would be much happier with the Australian dollar down from its current US90c level to around US85c.

"Financial conditions are now fairly loose in Australia with the cash rate at its lowest level in 53-years and with the Australian dollar now largely doing its job, the RBA is likely to see that it has met the preconditions for a rebalancing of growth," he said.

"Plus the RBA will likely soon start to worry that low rates may overinflate the housing market, an area where conditions are improving. We expect the RBA to hold the cash rate steady."

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